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The Dairy Cliff: Permanent Law Would Spike Milk And Raise Supports


October 07, 2025 02:37 PM • Tony St. James


NASHVILLE, Tenn. (RFD-TV) — If Congress fails to act, farm policy reverts to “Permanent Law” from 1938/1949, forcing USDA to prop up prices using parity-era formulas and tools like nonrecourse loans, government purchases, and (for some crops) quotas.

Dairy would jump first—the mandated purchase price pencils to $49.43/cwt, roughly double recent market levels near $22.80/cwt, creating the well-known “dairy cliff.”

For crops, minimum support levels tied to parity would also rise well above today’s benchmarks: corn ~$7.45/bu (50% of parity), wheat ~$15.08/bu (75%), and upland cotton ~$1.59/lb (65%). Soybeans are not covered under Permanent Law, so no parity support price applies. The USDA would need weeks to establish rules, but the direction is clear—greater intervention, higher federal costs, and market distortions until a new bill or extension is passed.

Some backstops continue, regardless: federally backed crop insurance remains in effect, and many IRA-funded conservation programs are authorized through 2031. But numerous rural development and smaller programs could stall without reauthorization.

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